What’s In Your Wallet? Wait, You Don’t Need One
Posted by Xeno on August 17, 2012
… Google, Starbucks and Wal-Mart are among the many firms that are eager to replace consumers’ wallets and stores’ cash registers, with smartphones and other mobile devices.
Recently, Intuit — the company that owns the personal finance site Mint and makes TurboTax and Quicken — has been selling a small attachment for smartphones called “Go Payment.” The device lets almost anyone, anywhere accept a credit card.
Girl Scouts On The Cutting Edge
Omar Green, Intuit’s director of strategic mobile initiatives, says he saw the future when he stumbled on a savvy Girl Scouts troop.
“It became very obvious to me that there was a grand sea change in payments when the Girl Scouts started using Go Payment,” Green says. “It was like, boom! It was crazy how much money these little girls were bringing in with Girl Scout cookies.
“So it hits me, we have got little 8-year-old girls who are not just consumers, but are merchants with Girl Scout cookies,” he says. “So the next year, we went after the Girl Scouts in a major way.”
For businesses, getting set up to accept credit cards was a big hassle five years ago. You needed to get a special machine to process electronic payments. Then you were charged a tangle of fees by banks and card processors.
“It’s time to rethink these models,” says Jack Dorsey, best known as the co-founder of Twitter. Dorsey’s other company, Square, has blazed new ground in mobile payments. It developed one of the first little plug-in fobs that could transform smartphones into tiny little cash registers. It’s also created an app that lets consumers pay for products just by walking up to the counter at a participating store and saying their name aloud. …
Then again, this could result in some massive security breach headlines:
A new mobile phone payment system announced by 15 major retailers may change the way Americans pay for purchases, but security concerns could make the exchange a hard sell.
The retailers, which include Walmart, Best Buy, 7-11, CVS, Publix and 11 others, announced Tuesday that their Merchant Customer Exchange will allow customers to pay and receive deals at their stores, with more participating companies to be announced in the coming months.
The exchange hasn’t released all the details of its new system, but a spokesman for the group said it will make “shopping less expensive.”
The retailers account for $1 trillion sales, according to the exchange.
Other mobile payments systems allow users to input their credit card data into an app on their smart phones. Many merchants have scanners at checkouts which allow users to wave their smart phone with its identifying bar code or identification number to make purchases.
Previous breaches at the point of sale for TJ Maxx beginning in 2005 show how large and costly any problems with payment systems can be. TJ Maxx offered its affected 45.6 million customers who had their credit and debit information stolen credit monitoring and paid up to $24 million in a settlement with MasterCard. Michael’s, which is a member of the new exchange, had its own security breach in 2011.
One concern is that consumers will expose their credit card data or personal information to crooks.
“Security is only as strong as the weakest link,” said credit and cyber-security expert Adam Levin of Credit.com. “Humans are the weakest link. You may be able to take advantage of great deal but that requires storing information in your cell phone.”
“If a cell phone is lost, or you have weak passwords, the danger is you are giving someone access to your information which they can use for themselves,” Levin said. …